Elon Musk will not borrow against his Tesla ownership position to fund his Twitter takeover after the stock has had a rough month.
Musk revealed the expiry of a series of margin loans on Tesla stock, which had been included in his initial financing plan to purchase Twitter, in a filing with the Securities and Exchange Commission. Musk pledged an extra $6.25 billion in equity investment as part of the announcement, increasing his total commitment to $33.5 billion.
Musk’s first plan to buy Twitter included a $21 billion personal equity investment and a $25.5 billion loan. A total of $12.5 billion in loans were secured by Musk’s Tesla stock. With a previous round of stock financing, Musk slashed that number in half, and he’s now reworked the contract to eliminate them completely.
The decision is in reaction to mounting pressure on Tesla’s debt and shares in general. Since Musk disclosed his buyout proposal, Tesla’s stock has plummeted, losing more than 30 percent of its value in less than a month.
Although a handful of equity partners have arisen since Musk originally launched his proposal, it’s unclear where the other $6.25 billion will come from. Musk disclosed an additional $7 billion in private equity capital earlier this month, including contributions from Oracle founder Larry Ellison and Qatar’s sovereign wealth fund.
Despite having legally committed to buying Twitter, Musk has been tight-lipped about his immediate ambitions for the company. He put the Twitter transaction “on pause” on May 13th, awaiting a thorough inquiry of artificial accounts on the network. He recently asked the Securities and Exchange Commission to look into the platform’s allegations concerning bot accounts.